- Personal Finance»
- Banks, S&L's, Credit Unions
4 Ways to Grow Your Savings
Our parents and elders have always been telling us to be careful with our money, and to save every last Rupee. This is sage advice – a Rupee saved is a Rupee earned, and when you save a lot of money, you are in pole position to secure your future!
Presenting four simple ways to grow your savings:
1 Save every month.
The only way to save money is to…save money! Set aside your savings the moment you get your monthly pay cheque, or surplus money from insurance maturity, performance bonus, gifts from relatives, etc. Start with a minimum limit of Rs 5,000 per month, then increase it to Rs 7,000 or more when your income increases. Over the years, you will have an enviable sum of money set aside.
2 Look for savings accounts with higher interest rates.
Simply depositing your savings in the bank is of little consequence. You must look for the right bank interest rate to maximise your savings’ growth. Every bank has a specific savings account interest rate – usually it is 4% - which is paid every financial quarter on the monies deposited in the account till that point. Choose a bank that offers a high 7% savings account interest rate from the first Rupee deposited in the account. Simple math dictates that the more money you save, the more will be its annual credit capitalisation through bank interest rate.
3 Use your bank’s net banking or cards for cashback and rewards.
Your bank offers you several reward points and cashback offers, apart from discounts and freebies, on shopping using their net banking or mobile app. Prominent banks have tie-ups with scores of online merchants, utility service providers, third party payment platforms etc. to offer customers loyalty points, cash back offers, discounts, and other incentives. You can save a lot of money every time you shop, book holidays, buy movie tickets and pay utility bills using your bank’s cards or net banking channels.
4 Create a fixed deposit with your savings funds.
The best way to increase your savings is to invest the entire sum in a fixed deposit. There are two benefits of doing this: the fixed deposit pays a constant rate of interest throughout the tenure of the deposit. The second advantage is that you are less tempted to spend the savings if they are locked away in a fixed deposit. Once the deposit matures, you may reinvest it to get more growth or use the savings to fund a milestone like children’s higher education, down payment for a second home, buying a new family car, etc.